Consistent
Look to make your course regular, that men may know
beforehand what they may expect. – Francis Bacon
One thing I never understood early on in my career –- when I spent all of my time on the entrepreneur’s side of the table
-– was what venture capitalists, angel investors, executives, and others did after hearing a pitch. Not knowing any better, I assumed they made their decisions pretty much on their own.
However, as I started to make friends in the venture capital community, and started judging pitches at Washington University in St. Louis, I developed a very different view of the process. That view drove home to me the value of ensuring that an elevator pitch is consistent.
The way the process actually works is that almost every potential investor, executive, or backer is a specialist in some specific area, be it finance, technology, or marketing. Very few potential investors, executives, or backers actually have a deep understanding of all the different areas that are involved in putting together a successful new product, service, or other Solution. As a result, the smart ones compensate for the holes in their knowledge by building up networks of people that they can go to and whose opinions they trust.
I saw this happen first-hand in 1999 during the heart of the dot-com boom. One of my friends is a venture capitalist. He is an expert when it comes to the world of finance and deal structuring, but doesn’t have a deep knowledge of technology or new product development. As a result, when looking at a potential deal, he would ask me to have breakfast with him and would explain the deal to me and ask me for my technical and general opinion of it. I would then give him my opinion of the technical feasibility of the idea and the general feasibility of the idea (i.e. whether it addressed a problem that was causing significant amounts of pain). THE BENEFITS OF CONSISTENCY
Given that powerful people are constantly talking to each other, you must be sure that everyone hears the same basic message.
When I am working to balance out the requirements of making an elevator pitch both consistent and customized, I try to make sure that 80 percent of the content is pretty much the same between the different versions of the pitch. That means that I usually start out with the same summary sentence and body text, but customize the close of the pitch. The benefit of sticking with the 80 percent commonality rule of thumb is that if someone hears a version of your elevator pitch that isn’t targeted directly at them –-- if for example a potential investor hears the employee-oriented version of your elevator pitch – they will still understand what you are talking about.
All of this emphasis on creating an elevator pitch that is both consistent and customized is important because at the end of the day word of mouth is an extremely important and powerful tool. The more attention you pay to crafting a message that can be easily spread from one person to the next –- and the more you focus on turning your audience into your salesforce –- the faster and better your message will spread. This is because people tend to place much more trust in messages that they hear from people they know than they do from sources like advertising.
BEYOND THE SUMMARY SENTENCE
With that in mind, let me give you a sense of how to flow out an elevator pitch in a way that allows you to satisfy the need for your elevator pitch to be consistent but also customizable...
Summary Sentence
The Customer
The Problem
The Pain
The Competition
The Solution
The Features
The Benefits
The Team
The Objective
The Deal
The Technology
We largely followed this flow in the SalesLogix elevator pitch that I have discussed earlier, so let me explain this flow in the context of that pitch.
The Customer
Early on in your elevator pitch, it is important that you give the audience a sense of who your target customer is.
One thing this will do is help explain the WHAT of your innovation. It will also help you look more focused and thus more concrete.
I can’t tell you how many pitches I have heard that focus on the Solution and completely ignore the customer. Pitches like these make me extremely nervous because they make me wonder whether the team actually understands basic, but critical, things like sales and marketing or whether they think their Solution will sell itself.
When it came to the SalesLogix elevator pitch, our target customer was generally mid-sized (or middle market) organizations. As a result, in our customer statement we made that explicit by using the phrase “mid-sized companies.” We also helped to establish who our target customer was by using the phrase CRM and by naming our two chief competitors...
SalesLogix is targeting mid-sized companies that have outgrown contact managers like Act but can’t afford the cost and complexity of high-end CRM products like Siebel.
The Problem
Experienced venture capitalists, executives, and other backers understand that for your Solution to have a good chance of succeeding, it is important that it solves a problem. As a result, when listening to an elevator pitch, they will be on the lookout for evidence that your Solution is built around a good problem.
The best way to deal with this requirement is to explicitly discuss the problem your Solution solves in the body of your elevator pitch. You should do this around the same time you discuss the customer, because in most cases the problem and the customer are intertwined.
One way to explain the problem your Solution solves is by explaining what is wrong with the state of the art, and a good way to do that is with the word “too.” By “too,” I mean that you should establish that the state of the art is too slow, too expensive, too heavy, too big, too time-consuming, or something like that.
When it came to SalesLogix, the problem wasn’t that there weren’t any solutions to the problem. There were. Rather, the problem was that existing solutions forced customers to make an impossible choice between usability and power...
The problem with existing CRM solutions is that they fall into one of two categories. On the one hand, you have contact managers like Act that salespeople love but that do not allow people to share information across a large organization. On the other hand you have high-end CRM systems like Siebel that scale to support the needs of hundreds or thousands of users but that sales-people refuse to use.
We created SalesLogix to solve that problem; to give organizations a system that was both easy to use and powerful.
The Pain
While solving a problem is extremely important, it isn’t enough to guarantee that your Solution will be successful. That is because in many cases it is easier, and less risky, for people to just deal with the pain that is caused by the state of the art than it is for them to endure the pain, and take on the risk, of switching to a new product or solution.
As a result, what you need to provide in your elevator pitch is evidence of the pain; evidence that the state of the art is so badly broken that it makes more sense for the customer to switch to a new solution.
Sometimes it is helpful to think of the pain as the consequence of the problem; as the cost of the pain put in terms of time or money. It then makes sense to discuss the pain in those concrete terms. However, if the customer already understands the pain they are in, and is simply looking for a solution to it, then you can discuss the pain at a more conceptual level. That is what we did in the SalesLogix elevator pitch...
The result is that too many organizations are unable to...
• Coordinate their sales and customer service teams.
• Obtain a holistic picture of the customer.
• Maximize the revenue gained from each customer.
One thing to notice about this part of the SalesLogix elevator pitch is that, because the buyers of our product (sales managers) weren’t necessarily the same as the users of our product (salespeople), we slanted our characterization of the pain so that it would resonate more with the buyer of our product than the user. In other words, we explained the pain in the context of the sales manager’s job and not the salesperson’s job.
The Competition
Too few elevator pitches mention the competition. While this is understandable, the problem is that ignoring the competition can do several things.
First, ignoring the competition can damage your credibility; it can make people worry that you are so naïve as to think that you don’t have any competition. Second, not mentioning the competition can make the audience wonder whether you have done your homework. Third, not mentioning the competition can make the audience wonder whether an opportunity actually exists. While in some cases the absence of competition points to a huge opportunity, in other cases it can indicate that the problem simply isn’t worth solving.
In the SalesLogix elevator pitch, we mentioned the competition on multiple occasions...
SalesLogix is targeting mid-sized companies that have outgrown contact managers like Act but can’t afford the cost and complexity of high-end CRM products like Siebel.
However, in mentioning the competition we also made it clear what was wrong with the state of the art. The competition was not perfect, which created the opportunity that we saw.
The Solution, the Features, and the Benefits
Once you have established both the problem and the pain, then it’s time to revisit your Solution and explain WHAT it is in slightly greater detail, usually in the context of features and benefits. A good rule of thumb to follow when doing this is to never mention a feature without tying it to a benefit.
Discussing your Solution and its features in the context of the benefits it delivers is important because it improves the likelihood that the audience will remember what you are saying. Instead of simply loading them down with facts, by also discussing the benefits you are giving the audience the context they need to appreciate and remember what you are saying.
The best place to look for benefits is in your statement of what’s wrong with the state of the art. The benefits you must deliver in order to be successful are the opposite of what’s wrong with the state of the art.
If the state of the art is expensive, you must be affordable. If the state of the art is slow, you must be fast. If the state of the art is cumbersome, you must be easy to use.
Where possible, when it comes to talking about benefits it is best to describe them in times of either money or time. That means explaining how a feature will help the customer make money, save money, or save time.
When it came to the SalesLogix elevator pitch, we stuck with a higher-level explanation of the benefits of our product. This was because we knew that customers were going to be using SalesLogix to replace an existing, unsatisfactory system. As a result, we knew the audience could compute the value of the benefits themselves...
In contrast, SalesLogix delivers the best of both worlds...
• The affordability and ease of use of a contact manager.
• The scalability, database synchronization, customization, and reporting capabilities of a high-end CRM system.
The Team
Too many elevator pitches either spend too little –- and in many cases absolutely no –- time talking about the team or they don’t talk about the aspects of a team that really matter. This is a problem because the team is often the first thing potential investors and backers consider when it comes to judging whether to invest or not.
As a result, toward the end of your elevator pitch you must mention the qualifications of your team to see the problem and to build the solution. This doesn’t mean you need to name each individual person. Only do that if a person’s experience is especially impressive or relevant. Instead, in most cases it is enough to add up how much total experience you have in the market you are targeting.
This is what we did in the SalesLogix elevator pitch. We explicitly named our CEO and his experience because it was so important for establishing our credibility. However, we also gave a hint of the overall depth of experience of the team as a whole, without spending too much time doing so...
The SalesLogix team has over 75 years of combined experience in the industry and is led by Pat Sullivan, the co-founder and former CEO of Contact Software International, the original developer of Act.
The Objective
As I explain in the Customized chapter, while an effective elevator pitch is generally consistent across its different versions, it must also be customized so that it addresses the interests of the audience. The place to do most of that customization is in the objective. For example, a customer-oriented version of an elevator pitch will have a very different objective (sometimes asking for a next step or even the sale) than will an investor-oriented elevator pitch.
In the case of the version of the SalesLogix elevator pitch I discuss in this book, it was focused on raising money from venture capitalists. As a result, it mentioned how much money we needed and what we intended to use that money for, which we knew were the main things venture capitalists would be interested in...
SalesLogix is seeking $5 million to finance the continued development and marketing of SalesLogix 1.0, which is scheduled to be released in April 1997.
In contrast, the customer-focused version of the SalesLogix elevator pitch closed differently, with a call to action and a reiteration of the positioning of SalesLogix... We invite you to meet with us afterwards and learn more about SalesLogix, the first true CRM solution that’s as easy to use as Act.
Notice how this customer-focused closing statement is consistent with the positioning statement that we used in all of our marketing materials.
The Deal and the Technology
While some people think an elevator pitch should address such things as valuation, I believe that an effective elevator pitch leaves the deal and the technology (e.g. the HOW of your Solution) to later conversations. When it comes to the deal, things like valuation and capital structure are details that can and should be determined or negotiated at a later point, which makes it pointless –- and a waste of precious time
–- to discuss them in your elevator pitch. When it comes to the technology, operational details, and other HOW-oriented elements, you simply do not have time to do them justice, so it’s best to not address them at all in your elevator pitch.
In the case of the SalesLogix elevator pitch, we didn’t lay out our product marketing strategies and tactics. Instead, all we mentioned was how much money we needed and what we planned to do with it at a high level...
SalesLogix is seeking $5 million to finance the continued development and marketing of SalesLogix 1.0, which is scheduled to be released in April 1997.
Similarly, in the SalesLogix elevator pitch we didn’t get into the HOW of our Solution. Instead, we just mentioned some high-level features...
In contrast, SalesLogix delivers the best of both worlds...
• The affordability and ease of use of a contact manager.
• The scalability, database synchronization, customization, and reporting capabilities of a high-end CRM system.
We didn’t get into the corresponding benefits because we knew they would be self-evident to the audience to whom we were speaking. We also knew that we alluded to the benefits of our system when we talked about the pain. |